CMS Pub. 100-02, ch. 8, § 70.4

The SNF may arrange with others to furnish covered services such as physical therapy,

occupational therapy, or speech-language pathology services. The SNF (rather than an

outside provider/supplier, another SNF or a HHA) bills Medicare, and payment is made

directly to the SNF. When such arrangements are made, SNF receipt of payment for the

arranged services (as with services provided directly) relieves the beneficiary or any other

person of further liability to pay for them. See Pub. 100-01, Medicare General

Information, Eligibility, and Entitlement Manual, chapter 5, section 10.3, for a general

discussion of services furnished “under arrangements.”

The specific details of the ensuing payment arrangement between the SNF and the

outside supplier (such as the actual payment amount and timeframe) represent a private,

“marketplace” transaction that is negotiated between the parties themselves and falls

outside the purview of CMS. This means, for example, that payments by the SNF to an

outside supplier for bundled services furnished to the SNF’s Part A resident under an

arrangement made with the outside supplier are not governed by the specific Medicare

fee schedule amounts or claims processing timeframes that would apply to services billed

to Medicare separately under Part B; however, in order for the arrangement itself to be

valid, the SNF must, in fact, make payment to its supplier for services rendered. See Pub.

100-04, Medicare Claims Processing Manual, chapter 6, sections 10.4ff. for additional

information on arrangements between SNFs and their suppliers.

The arrangement must also comply with the fraud and abuse laws (see Pub. 100-01,

Medicare General Information, Eligibility, and Entitlement Manual, chapter 1, section

20.3, and Pub. 100-04, Medicare Claims Processing Manual, chapter 6, section 80.5).

Questions about the interpretation and enforcement of the statutory anti-kickback

provisions in section 1128B(b) of the Social Security Act should be directed to the

attention of the Industry Guidance Branch in HHS’s Office of the Inspector General

(OIG); see the regulations at 42 CFR Part 1008 and the OIG website at

https://oig.hhs.gov/compliance/advisory-opinions/index.asp.